A $1.94 billion deal has allowed China’s state-owned Bright Food to have majority stake over British cereal maker Weetabix Food. Bright Food will buy a 60 percent stake in Weetabix from the private equity firm Lion Capital LLP while Lion Capital and Weetabix management keep the remaining 40 percent. Bright Food has previously attempted to expand overseas, but has failed many bids for major corporations such as Yoplait, United Biscuits, CSR’s sugar division, and GNC. This venture is its largest overseas deal yet and its second overseas acquisition this year, after its 75% stake in Australian-focused Manassen Foods Australia purchased from Champ Private Equity in August. Bright Food had a focus on acquisitions even within China, and they plan to continue their growth through acquisitions abroad.
Bright Food is China’s leading food group, and is aiming to acquire sugar, wine, and dairy assets abroad. Its goal to become the major global foodmaker is supported by the Shanghai government, which encourages Bright Food's foreign acquisitions. Because Bright Food doesn’t currently make cereal, it aims to bring the Weetabix brand throughout China and overseas to make it the dominant brand in Asia. Bright Foods plans to increases foreign sales from 5% of revenue to 30% of its revenue in five years. If Bright Food is able to continue acquiring foreign companies and using its distribution network to introduce new goods throughout China and internationally, Bright Food will definitely benefit from these acquisitions. China’s booming middle class is spending more and more money on groceries, with over $970 billion spent on groceries in 2011, and many Chinese will definitely need a delicious breakfast!